Who’s Here: David Walentas, Real Estate Mogul

Real estate mogul David Walentas

June 15, 2014 by Dan Rattiner

When I write “Who’s Here” profiles for Dan’s Papers, I almost never inject my own feelings about the person I am describing. But in the case of David Walentas, something came up in my first encounter with him 20 years ago, almost by accident, that makes this an exception.

Walentas and his wife, Jane, had just bought the largest dairy farm in the Hamptons, the 100-acre Sayre Baldwin place on Hayground Road, when I first met him. Baldwin had become wealthy running that farm. He was the longtime Chairman of the Bridgehampton National Bank. But when he died, in 1987, his son Dan moved to Delaware to farm on a 1,000-acre spread there and put his father’s farm up for sale. He soon met a little-known New York City real estate developer who made him an offer of $2 million. David Walentas had much experience working on farms as a young man in upstate New York. Walentas would continue the farm as a horse farm, and as a retreat for his family. And so the transaction proceeded.

Walentas, a handsome, slender man about my height (five-eight), showed me around the farm back then. This was in 1992. He told me he had removed the trailers in which the help lived, and with the town’s permission, had built them, to code, a new and proper housing unit. He showed me the main house and the pastures and the indoor riding rings he was constructing. We walked by workmen in trucks with South Carolina license plates that were part of a trucking company that Walentas had just purchased and was restoring back to health.

“I spend a lot of time in South Carolina,” he said. It was a beautiful day, and we walked around and through the pastures to see the great corn silo behind the farmhouse on the property. All would be saved. And indeed they have been to this day. This grand farm today is known as “Two Trees” and is where the Bridgehampton Polo matches are held every Saturday in July and August every summer.

In the course of that walk-around, however, Walentas mentioned another project he hoped would be successful. He had bought a huge section of waterfront in what was then the rundown, crime-ridden borough of Brooklyn. It faced out onto the skyscrapers of Manhattan and was called Fulton Landing, bounded on one end by the East River, on the sides by the two bridge overpasses for the Manhattan and Brooklyn Bridges and at the back the Brooklyn-Queens Expressway. All together it was five blocks one way and six blocks the other, built up shoulder-to-shoulder with warehouses and former manufacturing plants, mostly abandoned, ranging from 5 to 15 stories high.

“It’s about 2 million square feet of space,” he told me. “It has water views, much of it, and there are beautiful old cobblestone streets. I’m going to make it a new section of New York City.”

When I first moved to Montauk from New Jersey as a teenager years before, I was fascinated to find out that the big building in the center of that town, the great hotel on the hill and a dozen or more other buildings and ranches and yacht clubs, had been all built in the late 1920s by a man named Carl Fisher. The big building, seven stories high, standing alone in the center of town, was intended to be the first of many skyscrapers. Montauk was to be a major summer resort city. The project failed in the Crash of ’29. But one could not but admire the grandeur of the effort.

This project in Brooklyn, it seemed to me, at the other end of the island, was of the same order as the one at Montauk. My immediate reaction to learning of it was that I wanted to see it. I had never been there before as far as I knew. All those dreary abandoned buildings in Brooklyn looked the same to me. I also immediately decided I liked this man and his dream.

“We’re changing the name,” he told me. “You know how SOHO and NOHO in lower Manhattan have become successful? This we intend to call DUMBO. It stands for Down Under the Manhattan Bridge Overpass.”

Weeks later, Walentas had me meet him there. It was a dark, abandoned, almost sinister place. Nobody was around. Occasionally a truck would drive through the potholes of the cobblestone street. We walked the site. He took me to the waterfront, which was almost entirely blocked from the interior by the abandoned buildings. Trash was strewn everywhere. You had to be crazy to want to develop this.

“I bought it from Helmsley-Spear for $12 million,” he told me. “But I didn’t have the $12 million. So I borrowed it. Not from a bank. I couldn’t get a bank to lend me the money on this. I borrowed much of it from Ronald and Leonard Lauder.” Walentas’s wife, Jane, worked for Esteé Lauder. David had apparently talked them into it.

I had one exhilarating thought as I walked through this. As it was bound on all four sides, it clearly had an identity as a section of the city. Dumbo? It could happen. At that point, in 1992, I had been running summer newspapers for 30 years. I often sized up new communities I visited where there were no newspapers yet. “If you can make this happen,” I told him, “I will put a newspaper in it.”

Well, it happened. But I didn’t. But we all know what has happened to Dumbo during the generation that followed. In the rough-and-tumble world of real estate development, Dumbo has become a huge success. And Walentas not only still owns almost all of it, he has also bought a million more square feet of adjacent warehouse space to develop.

Last week, when, at Walentas’s invitation, I returned to have a look, I found streets filled with people, cars and trucks, businesses, coffee houses, art galleries, stores, apartments, lofts, software businesses and nightspots and even a half-mile-long park along the waterfront with the magnificent views of both bridges framing Manhattan across the water. Playgrounds and walkways and even a grand carousel occupied the park. Parents and children were everywhere.

“Made in Philadelphia in 1922,” David told me as he pointed out the carousel—48 horses. “My wife had it brought in here and restored it. We hired architect Jean Nouvel to build the pavilion that surrounds.”

We walked through the community and up into the Clocktower Penthouse of the tallest building, which is currently on the market for $15 million, more than two-thirds the price Walentas paid for the whole shebang
30 years earlier. He has become a billionaire. And the two of us, about 50 years old then, are now 70.

“My son Jed runs the place now,” Walentas said, a twinkle in his eye. “I work for him.”

Last month the publication The Real Deal interviewed billionaire Walentas about these 30 years. I found it on Google. Here is one part of the exchange between reporter and developer.

“What has been your biggest contribution to society?”

“My kid, Jed, who is terrific. But in a larger sense, probably Dumbo. As a large urban development, it is one of the few things that will matter in 100 years.”

“You make it sound like you are solely responsible for Dumbo.”

“I am solely responsible. My wife Jane, who has been my partner, certainly she was responsible, but we didn’t get a lot of help from the government and nobody wanted to work with us for a long time. Nobody really got it. The planning people didn’t get it. The community board voted against every rezoning we proposed down there. My partners all quit, so we ended up with all the marbles.”

David Walentas was born and raised in Rochester, New York. When he was six, his father, who worked for the post office, had a stroke and became paralyzed. The following year, his mother, struggling to hold a job while taking care of her husband, essentially farmed out the kids to live on farms owned by neighbors in the town of Red Creek, halfway between Rochester and Buffalo. The farm David lived on had a water pump in the kitchen, an outhouse and a wood stove.

“We worked on these farms. It’s fair to say we were halfway between orphans and indentured servants. But it worked out.

“That’s how old I was when I started working,” he told me. It was up early every morning to milk the cows and do other chores.

He was fresh to the teachers in grammar school and was thrown out of class numerous times. But in high school he became class president, and then got an ROTC scholarship for four years of study at a college of his choice. He would be trained as a Naval officer. He applied to and was accepted at the University of Virginia to study Mechanical Engineering. He would have liked to study architecture, but the ROTC program scholarship was only for four years. Architecture was five.

In his third year at Virginia, however, he was caught in the women’s dorms and was thrown out of ROTC for conduct unbecoming to an officer and a gentleman. As a result, he lost his scholarship and left school to return home. Back home, he got jobs and saved and soon returned to Virginia on his own dime, to finish school and get his Mechanical Engineering degree.

“After that, I decided to go to Europe for a while after graduation,” he told me. “I arranged for a job as a laborer at the American military base in Thule, Greenland. The pay was good, and it also included room and board.”

Walentas paused as he recalled this.

“Nothing thaws in Greenland,” he continued. “The work was to clean the septic tanks. I got in them with a shovel and I cleaned them. The stuff I got out got put on barges and hauled away.”

When the job ended, Walentas flew to Copenhagen to rest up, fell in love with a Danish girl, got odd jobs, bought a Volkswagen, visited his brother who was in the military in Madrid, then went to North Africa and Casablanca. When winter ended he found himself living in a youth hostel at 5 cents a night while combing the docks looking for a boat ride home.

He was completely broke.

“All I wanted to do was go home. I found the captain of a 3,000-ton Danish freighter leaving for the States and convinced him to take me along. I’d be a deckhand. Then I had to convince him to also take my VW. It was my only possession. We landed in Brooklyn and I drove to a bloodbank and sold a pint of my blood for $10 so I would have enough money for gas for the drive home to Rochester.”

Soon Walentas was back in school, back at the University of Virginia, getting a graduate degree in Business Administration. Then he got a job with Singer and, as an engineer, went to Australia and Japan. With the money he made, he paid back his college loans.

In 1968, at the age of 30, he went into the real estate business with Jeff Byers in Manhattan. They’d be developers. Byers owned an art gallery in the city. But he was also the heir to several fortunes. His great grandfather owned Byers Steel, his grandmother was Mrs. W. R. Grace and his father was William Paley. Byers and Walentas called their real estate firm Two Trees.

“We made a lot of money in the New York City real estate business,” Walentas said. “We converted apartments to co-ops. We developed Alwyn Court (at 58th Street and Seventh Avenue.)’’

Byers jumped out a window in December 1975, apparently, according to Walentas, in the belief that he was not as good or as wealthy as people thought he was. It was a year after the country went into recession and it was a terrible blow for Walentas but he continued on. He also managed to survive the recession of 1990.

Soon after that, he went heavily into Manhattan real estate and then Brooklyn. Besides his dream at Dumbo, he restored and converted 110 Livingston Avenue, the former School Headquarters building in Brooklyn. Today, he and his son own and rent out more than 3,000 apartment units in New York, including almost 1,000 at the Mercedes House at West 53rd Street and 11th Avenue. They also own most of J.P. Morgan Chase International Plaza in Dallas.

And then there is Domino, a new project on the Brooklyn waterfront, two miles north from Dumbo. After touring Dumbo with Walentas last week, Walentas drove me there.

Many old waterfront buildings there were undergoing demolition with wrecking balls. Walentas spread out some plans. Domino, when accepted by the city planners, will consist of four new buildings, two of which will be 50-story towers on the waterfront flanking a full restoration of the former Domino Sugar Building at Second Street South. There will be a waterfront park, 2500 apartments and 500,000 square feet of office and retail space. And much of the project, 20%, will be low-income housing. (It got its final go-ahead by the city last week, Walentas emailed me yesterday.)

I don’t know what else to say about David Walentas, his wife, Jane, and son Jed. Here in Bridgehampton, he got permission last year to put a small development of private homes on the most northerly reaches of the farm he owns. It’s 17 lots on 34 acres. The homes will have beautiful views of the polo fields, the pond in the back and farm house and silos and barns and stables in the front on the road on the remaining 65 acres, which will remain as farmland far, far into the future.

All I can say is that David Walentas has established himself as one of this country’s great real estate developers, in this case building an entire neighborhood in New York City where there had been none before, and now, at Domino, perhaps a second.

According to an article in Forbes magazine, Walentas has had stitched the motto “No Guts—No Glory” into all his shirts to remind himself of the daring, cowboy-like role he has chosen to take in this world as his life’s work.